Correlation Between Asian Hotels and Tamilnad Mercantile
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By analyzing existing cross correlation between Asian Hotels Limited and Tamilnad Mercantile Bank, you can compare the effects of market volatilities on Asian Hotels and Tamilnad Mercantile and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Asian Hotels with a short position of Tamilnad Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asian Hotels and Tamilnad Mercantile.
Diversification Opportunities for Asian Hotels and Tamilnad Mercantile
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asian and Tamilnad is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asian Hotels Limited and Tamilnad Mercantile Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamilnad Mercantile Bank and Asian Hotels is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Asian Hotels Limited are associated (or correlated) with Tamilnad Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamilnad Mercantile Bank has no effect on the direction of Asian Hotels i.e., Asian Hotels and Tamilnad Mercantile go up and down completely randomly.
Pair Corralation between Asian Hotels and Tamilnad Mercantile
Assuming the 90 days trading horizon Asian Hotels Limited is expected to generate 5.37 times more return on investment than Tamilnad Mercantile. However, Asian Hotels is 5.37 times more volatile than Tamilnad Mercantile Bank. It trades about 0.45 of its potential returns per unit of risk. Tamilnad Mercantile Bank is currently generating about -0.6 per unit of risk. If you would invest 19,639 in Asian Hotels Limited on October 11, 2024 and sell it today you would earn a total of 10,011 from holding Asian Hotels Limited or generate 50.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asian Hotels Limited vs. Tamilnad Mercantile Bank
Performance |
| Timeline |
| Asian Hotels Limited |
| Tamilnad Mercantile Bank |
Asian Hotels and Tamilnad Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asian Hotels and Tamilnad Mercantile
The main advantage of trading using opposite Asian Hotels and Tamilnad Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asian Hotels position performs unexpectedly, Tamilnad Mercantile can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tamilnad Mercantile will offset losses from the drop in Tamilnad Mercantile's long position.| Asian Hotels vs. Praxis Home Retail | Asian Hotels vs. Hindware Home Innovation | Asian Hotels vs. Kohinoor Foods Limited | Asian Hotels vs. Aban Offshore Limited |
| Tamilnad Mercantile vs. Rossari Biotech Limited | Tamilnad Mercantile vs. Newgen Software Technologies | Tamilnad Mercantile vs. Asian Hotels Limited | Tamilnad Mercantile vs. Orient Technologies Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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